Analysis: Pharma swimming against IP tide?

WASHINGTON, May 23 (UPI) -- In an effort to head off a potential worldwide flood of so-called compulsory drug licenses -- where foreign countries skirt intellectual-property laws and make generic versions of a patented drug -- the head of the U.S. pharmaceutical manufacturers' trade group met with Thai officials this week, but activists say those efforts might not prove successful.

"It's not just what Thailand is doing," said Billy Tauzin, CEO of the Pharmaceutical Research and Manufacturers of America, a lobbying group that represents U.S. drug makers.

"The example set by the Thais is very important," Tauzin told reporters after the meeting with Thai Health Minister Mongkol na Songkhla, where he said he urged the government to return to negotiations with drug manufacturers.

World Trade Organization rules allow countries to issue a compulsory license overriding intellectual-property rights when they need drugs to combat a public-health emergency. The license allows the country to manufacture its own generic version of a drug while making a small royalty payment to the drug company that holds the drug's patent.

The Thai government has taken advantage of the compulsory license provision several times in the past year, issuing compulsory licenses for the AIDS treatments Kaletra and Sustiva, saying it could not afford to provide treatment to the roughly 500,000 Thais with HIV at the prices the manufacturers want to charge.

Pushing the definition of "public health emergency," the government then issued a license for the blood thinner Plavix, and earlier this month the Health Ministry said it will issue compulsory licenses for cancer drugs.

Use of compulsory licenses could spread far beyond the borders of Thailand. Brazil recently issued its own compulsory license for Sustiva, and other countries appear poised to follow suit.

To prevent a worldwide explosion of the licenses, the pharmaceutical manufacturers' association is fighting back, Tauzin told United Press International. In addition to meetings with officials in developing countries, the group is urging the U.S. government to consider pushing back at the Thai government by taking away preferential trade status or filing a complaint with the World Trade Organization, a reversal of the current official position that the Thai licenses are in accordance with international law.

"We can and will continue to have discussions with our own government and officials around the world to promote intellectual property protection," he said.

Drug manufacturers also hope their support of charity programs in the United States and the developing world will encourage countries to negotiate, instead of issuing compulsory licenses, Tauzin added.

But those efforts may not be enough to outweigh the pressures countries face to expand access to AIDS treatment.

Legally, countries are well within their rights to issue the licenses, and economically they have a tremendous incentive to do so, said Shamnad Basheer, a visiting professor of intellectual-property law at George Washington University.

"A lot of countries are going to see this as an enormous opportunity," Basheer told UPI.

Countries like Thailand are such a small part of the global market for the drugs that their licenses are unlikely to cost countries in the form of less research and development as drug manufacturers have alleged, he said, but the countries have a lot to gain by making cheaper drugs to treat their AIDS populations.

Because those forces are strong, drug makers would have more success changing the way they sell drugs than trying to legally or politically pressure developing countries, Basheer said. "There's a problem with how they are selling in the global market, and they need to look at it and change it.

"They need to think of innovative ways of changing their business model, of changing their pricing.

Many advocates of the compulsory licenses are defiant in the face of drug company admonitions.

"The bottom line here is that compulsory licenses are a right that every nation has and no amount of propaganda from (drug companies) is going to change that," Michael Weinstein, president of the AIDS Healthcare Foundation, told UPI.

"Thailand is doing the right thing and the (pharmaceutical manufacturers' association) is trying to demonize them and it won't work," Weinstein said.

"If you want to take a stand on intellectual property (covering) sunglasses, that's one thing. But you can't do it over lifesaving medication."